Is that the right question? What is the goal of scaling agile? Isn’t it to be agile at all levels? So, we are essentially looking at creating an agile organization.

You may say, that may be a matter to semantics. But the implications are how one would go about achieving it. As it is with most organization, they would have started small (a team or two) and then try to expand it through the organization. Now, you want it to permeate the entire organization and hence the term scaling agile.

However, if we do look at it from creating an agile organization perspective, we are likely to take a holistic view of the endeavor. As we continue to coach teams to be agile, we also take a close look at the value streams of the organization. This is a really important step as it will help align the organization for maximum effectiveness. This also helps organizations to truly relook at their markets, offerings and delivery.

Once the value streams have been identified, measured the organization can start looking at refining the value streams to maximize the flow through them. This is where organizations are likely to find that they are not aligned to the key activity of delivering value to their customers in an effective manner. This will be an opportunity to try out restructuring part of the organization on a particular value stream. As always, experiment in the small but one must ensure that the entire value stream is impacted. Now, you have a potential new structure which could be replicated or a template for further refinement.

We must remember culture follows structure (Conway’s law). So, it’s important to derive the structure for your organization’s context rather than use cookie cutter structure proposed by some frameworks. Since we use an holistic way to arrive at it, we have a better chance of creating that is more closely aligned to the organizations values, principles and constraints. Also, as this was done “by the people, for the people”, not only would you have greater buy in, but a greater chances of it permeating though out the organization.

You may of course need a framework that can work at enterprise level. One may emerge as part of this exercise or you may find a non prescriptive one that works for you. Here are some (not in any particular order) …

“How many bed sheets? What about hospital gowns?” This was the pertinent conversation between the nurses from the intensive care unit and the regular hospital room where the patient was headed. The only question I have is – what about the patient? Isn’t that the reason the hospital exists?

This occurred during the handoff between two departments at a hospital. To their credit the nurses did exchange information about the patients condition, specific pecks needs etc. which were also documented. However, the bigger concern was if all the relevant hospital equipment like patient clothing was accounted for. The nurses were fined the cost of a lost bed sheet, gown etc. Is that the right area to focus? We do not want to lose equipment, but isn’t the valuable thing to do in this situation is to ensure the patient is transitioned correctly and she is on her way to speedy recovery?

Think about it. Whenever you have a “hand off” what are you arguing about? The artefacts that create a representation of the real thing or the real thing? If it’s the former, is that the most valuable thing to your customer?

It’s always nice to have those moments that blows your mind. Those, so called “ah ah” moments. I had one of those recently while reading James Womack’s Gemba Walks. I have been doing value streams for a while now. Always starting with the value we deliver to the customer. Map the key processes that do that.

But Womack in his essay talks about how does the customer actually consume what one delivers. Imagine the insight one has knowing the customer’s consumption process. Once we know that, it’s easier to design our process to provision the value the customer is looking for at the time she is looking for it and the location she needs it.

This really move our focus to where it should be – customer’s realisation of value. This helps a provider define their purpose better. It helps in provisioning goods or services when and where required based on the customer consumption process.

After we ran a few problem validation interviews, we had a good idea about what were the key issues that our potential customers face. We eliminated some of the assumed problems from our list and then had a relook at our solution offerings. We were not completely off the mark, however the priority order of the problem was much different than what we had assumed. Also, we discovered at least one new problem from these interviews.

We are services company, what do we demo?

For our solution interviews, we choose to highlight attributes of our Unique Value Proposition (UVP) and how this addresses the key problems that where highlighted during the problem interview and our pricing model. To demonstrate this, we showed the prospective customers, a few projects which highlighted these attributes. The demo was not restricted to technology/business solution but it also highlighted how we went about delivering the solution.

It’s important that we do not get carried away while doing these demo’s. This is neither a sales pitch nor a demonstration of all your capabilities. The key part is to provide just enough information on the key attributes of the solution offerings. The goal is then to listen and understand how this resonates (or does not) with the customer.

Once that was out of the way, we discussed our pricing model. And this can be a challenge for a seasoned sales person to do. However, it’s very important to get this feedback. Sometime, you may be surprised to find out there is more room in the upper range than you thought.

We have a done a few of these and the feedback has been as expected very valuable. It is helping us to refine our UVP and pricing model.

There are a plenty of examples for how to apply Lean startup techniques to starting a new venture or product companies. How about service companies? How can we use Lean startup to grow our business? Here is our experiment using Lean startup for software services company.

About Lean startup
We started by devouring Eric Ries’s, “The Lean startup”, Ash Maurya’s “http://runninglean.co/” books and the video’s at LeanStack. I am not going to repeat all their wisdom. I highly recommend these books and there are a good amount of blogs to get you up to speed with the technique.

Some key differences from a typical product based startup
While for a startup, you are working on getting new customers, for us the company already has customers but wanted to grow by expanding offerings and exploring new customer segments.

Irrespective of the fact if it’s an existing service company or a new one, the typical cycle of delivering software services is quite long. So the challenge here is how do we shorten that feedback loop?

Lean canvasIn the beginning, there is the canvas. The recommended time to create the Lean canvas is 20-30mins. It took us 3 hours! But it was worth it. It brought all the people involved on the same page on the most important things for the business – what are our customers problem? How are we solving it today? How can we solve it in the future? What customer segments do we care about? Expected revenue, cost structure etc. It’s highly recommended that this exercise is done with all the stakeholders in the same room.

Challenges

Grow by how much?
While he dived into the canvas in the order recommended by leanstack.com video’s, we soon realized we were all over the place. The thing that was missing was the goal. So we want to grow, great. By how much? Without this goal, it was difficult to narrow down the options while creating the canvas. E.g.: Do we need to address more problems? How many more customer segments should we go after?

Existing customers and/or new customers?
Without the goal, this was the other problem we debated. Should we have new offerings to our new customers or should we go after new ones? Or both. One could in theory achieve a reasonable revenue goal, by tailoring their offerings to their existing customer base. Of course most of the time, you would want to go after new customers, however, that is not easy nor a cheap proposition. But if you know that is the best way to achieve your goal, then customer acquisition cost is an investment one must make.

Customer segment
Was bit of a struggle. We could go very broad, like Agriculture or get very narrow, agriculturist in my backyard. Finding the right bucket is important. So it could to be a combination of a particular field and scale. E.g.: Agro companies who’s revenue is $200-250 million. Typically a company is already working with customers of a particular scale. That is a good starting point.

Actionable Metrics
While Dave McClure’s pirate metrics (AARRR) provide a good measure of the entire value stream of a startup, a little bit more detail may be required for service based companies acquiring new customers due to the longer feedback cycle. E.g.: We may have to use the customer acquisition lifecycle states (Suspect, lead etc.) while we are working on lead generation. Important thing is, to use just enough detail that is helpful and not add metrics for sake of metrics. The other important thing is to use the classical sales funnel metrics with cohorts for reporting metrics. Here is why.

Observations

Revenue and solution offeringsWhen we got to the revenue section of the canvas, the discussion generated a lot of great solution offering idea’s. In retrospect this seems obvious, as, we all wear our innovator hat when thinking of solutions, however when it does come to revenues that is when we have to make a real connection between solutions and what our customers may find useful and viable. It may be worthwhile to try doing the solution offerings section along with the revenue section of the canvas.

Problem statement
If you are an existing services company (which was in this case), you already have a pretty good idea about the problems your customers are facing. So it’s possible you can conduct problem interviews even before creating your canvas. This can give a real leg up on the proceedings. However, you still would want to spend some time working on the problem statements especially if you are going after new customers as the problems they have may not be same as the ones your existing customer have. A bonus from this exercise is a chance to ask your existing customers, what are the key problems they face. They may surprise us by highlighting things we never thought about.

We have conducted a few rounds of our problem hypothesis interviews and analyzed our validation metrics. It’s already invalidated some of our hypothesis, which if we did not do this exercise we would have used as a basis for creating solution offerings which no one would have bought.